"The H-1B Visa Program: Impacts, Policies, and Economic Significance in the U.S. Labor Market", Trump's administration 2.0

  

H-1B 

Employers looking to hire nonimmigrant immigrants for specialized jobs or as fashion models with exceptional talent and worth are subject to the H-1B program. Applying a corpus of highly specialized knowledge and earning at least a bachelor's degree or its equivalent are prerequisites for a specialty occupation. By permitting the temporary employment of qualified individuals who are not ordinarily permitted to work in the United States, the H-1B provisions aim to assist employers who would otherwise be unable to acquire the necessary business skills and talents from the U.S. workforce.The statute sets certain requirements to protect both the H-1B nonimmigrant workers and similarly employed U.S. workers from being negatively impacted by the employment of the nonimmigrant workers. Employers are required to certify to the Department of Labor that they will pay H-1B nonimmigrant workers wages that are at least equal to the prevailing wage for the occupation in the area of intended employment, or the actual wage paid by the employer to other workers with comparable experience and qualifications for the job in question, whichever is higher.US companies can hire foreign labor in specialist sectors including technology, engineering, and finance with the temporary, non-immigrant H-1B visa. Due to strong demand and an annual cap of 65,000 visas, applicants are chosen by a lottery system.Advantages for both exporting and receiving nations: India's "Brain Gain" Indian students' skill growth was fueled by the US IT demand. According to a survey, the return of 33% of STEM migrants strengthened India's IT industry. Indian company founders who were successful used their US-acquired talents.Trump's immigration rhetoric: The main focus of Trump's 2016 campaign was allegations of job displacement and misuse of H-1B visas. Following Trump's primary victory in 2016, the Economic Policy Uncertainty Index indicates that uncertainty surrounding migration increased.Impacts of ripples on international labor markets: India's distinct influence Seventy percent of H-1B workers come from India. Following Trump's primary victory, job postings in the US fell by 15%. Job listings from India increased, especially in industries that can be offshored, like IT.Firm changes in the face of uncertainty: To reduce risks, companies that depended on H-1B visas moved their hiring to India. India-based job advertisements increased by 11% for every 10% increase in reliance on H-1B workers.Policies aimed at limiting immigration may unintentionally encourage the creation of jobs overseas rather than preserving jobs at home. Employment trends around the world can be greatly impacted by speculation about immigration reforms. Predictable immigration laws are necessary. Families bear heavy human expenses as a result of immigration uncertainty in addition to economic ones. Policies that are predictable and stable are essential for creating a stable and balanced economy.

The U.S. labor market is in dire need of foreign workers, especially in the STEM (science, technology, engineering, and mathematics) sectors. Each year, U.S. firms who are looking to hire highly qualified foreign workers vie for the number of H-1B visas, which are distributed by U.S. Citizenship and Immigration Services (USCIS). Due to a low statutory ceiling on the number of available H-1B visas, demand has recently exceeded supply, and the cap was surpassed before the year ended. According to research, H-1B employees increase employment prospects for everyone, cover employment gaps in many STEM sectors, and supplement U.S. workers.

What is the category of H-1B visas? Under the temporary (nonimmigrant) H-1B visa category, companies can request highly qualified foreign workers to fill "specialty occupations" that call for a bachelor's degree or its equivalent. Jobs in disciplines like engineering, technology, medical sciences, and mathematics frequently qualify. An H-1B visa is normally granted for a period of three years, with the possibility of an extension of up to six years. In order to petition USCIS, a company must first make sure that hiring the foreign worker won't negatively impact American workers.Employers must take precautions to guarantee that hiring a foreign worker won't negatively impact domestic workers before they may submit a petition to USCIS. On a labor condition application (LCA) certified by the Department of Labor (DOL), employers must first certify that hiring an H-1B worker won't have a negative impact on the pay and working conditions of similarly employed U.S. workers. Additionally, employers are required to notify current employees when they plan to hire an H-1B employee.Congress has restricted the annual number of H-1Bs available since the category's creation in 1990. Foreign professionals who acquire a master's or doctoral degree from a U.S. university are eligible for an additional 20,000 visas, which is the current yearly statutory ceiling of 65,000 visas. On December 2, 2024, the ceiling was achieved for Fiscal Year (FY) 2025.Compared to the previous four years, USCIS originally rejected a higher proportion of H-1B petitions during the Trump administration. However, in the second half of FY 2020, the denial rates significantly dropped as more and more of these denials were overturned. From 6% in FY 2015 to a peak of 24% in FY 2018, the percentage of new H-1B petitions denied for initial employment fell to 21% in FY 2019, 13% in FY 2020, 4% in FY 2021, and just 2% in FY 2022 (the two lowest denial rates ever recorded).Compared to 7% in FY 2020 and 12% in FY 2018 and FY 2019, the denial rate for petitions for continuous employment decreased to 2% in FY 2022 and FY 2021.

The H-1B registration process Prior to 2020, firms were compelled to submit full H-1B petitions without knowing whether a visa number will be available, as demand for visa numbers typically exceeds availability. In March 2020 (for fiscal year 2021, commencing October 1, 2020), USCIS implemented a registration mechanism for employers before requiring a full petition. The goal of this new method was to alleviate the burden on US firms and the agency imposed by forcing employers to submit complete H-1B petitions and accompanying documentation before knowing if a visa number would be available.Every year, USCIS announces the next registration period, during which a US employer must register electronically for each foreign national for whom the firm plans to file.Before USCIS mandated registration, if the cap was reached during the first five business days of the fiscal year, the agency held a lottery to select which firms' petitions for H-1B workers would be processed. From fiscal years 2008 to 2020, the yearly H-1B cap was achieved eight times in the first five working days. The registration process requires the U.S. employer to pay a charge, which is increasing from $10 to $215 each registration submitted beginning with registrations for FY 2026. The registration contains limited information on the US employer and the foreign national, as opposed to the specifics required by USCIS when the US firm submits a full H-1B petition.The number of registrations that a U.S. employer may submit is unrestricted by USCIS; however, the employer must certify that it plans to file an H-1B petition on the foreign national's behalf and is not permitted to submit more than one registration per foreign individual. USCIS transitioned from an employer-based to a beneficiary-centric registration system in FY 2025. This modification came after the agency voiced "serious concerns" regarding whether system misuse resulted in USCIS receiving more eligible multiple registrations (those filed on behalf of a noncitizen with multiple registrations) than single registrations following the FY 2024 registration session.The government anticipates that a beneficiary-centric system will "structurally limit the potential for bad actors to game the system because working with others to submit multiple registrations for the same beneficiary will not increase" the likelihood that they will be selected. USCIS will hold a lottery to decide who is eligible to submit an H-1B petition if more registrations are received than there are visa slots available. Each beneficiary will only be counted once under the beneficiary-centric method, which will tally registrations "based on the number of unique beneficiaries registered." Prior to selecting registrants for the 20,000 master's exemption visa numbers, USCIS will choose the 65,000 visa numbers.Based on its estimates of the number of employers who will submit petitions and be approved by USCIS, the government chooses more registrations than there are visa numbers available. The agency does not disclose to an employer if other employers have registered on behalf of the same beneficiary when electronically informing them that their registration was chosen. Multiple companies may submit H-1B petitions to USCIS if they have selected registrations for the same beneficiary, much like under the previous registration system. The chosen beneficiary's U.S. employers who have active registrations will have at least ninety days to submit their H-1B petition to USCIS. USCIS may choose to make further selections if not enough petitions are filed to utilize the available visa numbers.On April 1, 2024, USCIS declared that it had picked 114,017 beneficiaries, for whom it had chosen 120,603 registrants, after receiving enough registrations for FY 2025. To attain the 65,000 regular H-1B visa number cap, USCIS held a second selection in August 2024. USCIS chose 14,534 registrations for 13,607 more beneficiaries (from the first registrations). The number of registrations filed on behalf of the same beneficiary decreased, and USCIS "saw a significant decrease in the total number of registrations submitted compared with FY 2024." FY 2024 and FY 2025 had similar numbers of unique employers and unique beneficiaries. But there was a "dramatic decline" in the number of qualified registrations.from 758,994 in FY 2024 to 470,342 in FY 2025, a 38.6% decrease. In FY 2025, USCIS recorded an average of 1.06 registrations per beneficiary, compared to 1.70 in FY 2024. As a result of the adoption of the beneficiary-centric selection procedure, USCIS found that its preliminary data "indicates that there were far fewer attempts to gain an unfair advantage than in prior years." USCIS made a second selection of 188,400 eligible registrants for FY 2024 on July 31, 2023 (from those that were not first chosen). The government received 483,927 registrations for FY 2023, determined that 474,421 were qualified, and on March 29, 2022, picked 127,600 registrations, which was enough to reach the FY 2023 cap.The government received 308,613 registrations for FY 2022, determined that 301,447 were eligible, but made three selections totaling 131,924 in 2021 since fewer selected firms than anticipated actually submitted applications. H-1B Workers' Effect on the American Economy Many economists contend that new employment prospects for native-born workers are created by the presence of immigrant workers in the United States. There are five ways this happens. First, individuals who are native-born and those who are immigrants frequently have different skill sets, which means that they work in various kinds of occupations.Instead than vying for the same positions, they thereby complement one another in the labor market. Second, the U.S. economy benefits from the expenditure and investment of immigrant workers' earnings, which boosts consumer demand and generates new employment. Third, rather than looking for fresh prospects elsewhere, firms expand their operations in the United States in response to the presence of immigrant workers and consumers. Fourth, the U.S. labor market is expanded by immigrants themselves, who often start new firms. Fifth, economic progress is fueled by the fresh concepts and inventions that immigrants create.Native-born workers in the US may have more job options because to the economic contributions of H-1B immigrants in particular. Because of this, occupations that employ a lot of H-1B workers have relatively low unemployment rates. The larger category of Professional and Related Occupations includes many of the occupations for which H-1Bs are frequently requested. Even during the COVID-19 epidemic, these occupations had low unemployment rates from 2004 to 2023, indicating that there was a greater demand for workers than there was supply.Likewise, a new study discovered that between 2005 and 2018, a higher percentage of workers in a given occupation with an H-1B visa was linked to a lower unemployment rate in that occupation. Multinational firms with headquarters in the United States are encouraged to reduce the number of employment they offer in this country by H-1B visa restrictions, such as increased denial rates, according to a new study. Rather, they either create new overseas affiliates, especially in China, India, and Canada, or they expand employment at their current foreign affiliates. A 2019 study found a strong correlation between the number of submitted patents and patent citations and the success percentage of H-1B applications.Additionally, these startups had a higher chance of obtaining venture capital funding and completing successful initial public offerings (IPOs) or acquisitions. Additionally, the evidence that is currently available shows that H-1B employees do not receive low pay or depress other workers' wages. The median pay for all U.S. workers in 2021 was $45,760, whereas the median pay for H-1B workers was $108,000. Additionally, the median pay for H-1B employees increased by 52% between 2003 and 2021. The median pay for all American workers rose by 39% over that time. A total of 78% of all firms who employed H-1B workers in FY 2019 paid H-1B visa holders more than the DOL-established "prevailing wage" for a certain type of employment.Communities across the United States gain economically from the H-1B visa program. For example, the New York City metropolitan area accounted for the greatest number of H-1B petitioners from FY 2017 to FY 2022 (372,100 H-1B visa petition approvals, or 15.2 percent of all H-1B visa petition approvals nationwide); San Jose, California, came in second (215,700); San Francisco, with 165,000; and Dallas, with 150,200. Responding to national emergencies can be greatly aided by the capabilities that H-1B workers bring with them, as the COVID-19 epidemic underscored.For example, from FY 2010 to FY 2019, the H-1B program approved 3,310 biochemists, biophysicists, chemists, and other scientists from eight U.S. companies that would later be involved in the development of a COVID-19 vaccine: Gilead Sciences, Moderna Therapeutics, GlaxoSmithKline, Inovio, Johnson & Johnson Pharmaceuticals, Regeneron, Vir Therapeutics, and Sanofi. Furthermore, a large number of medical professionals who are on the front lines of the pandemic are in the United States on H-1B visas.